Donate your car for charity

Edited by Jefrey Matias, Joely, Eng, Maria Quinney and 2 others

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Donating to charity is an excellent way to dispose of your old car. Rather than send it to the junkyard or trade it in, you can make a donation to a worthy charitable institution and in the process get a tax exemption. However, car donation to charity has been subject to fraudulent practices and misleading information. Recently, the New York State Attorney General conducted a long range investigation into the alleged fraudulent practices in the car donation industry. In a review of charities that raise funds using donated cars, it was revealed that there were illegal practices that cheated donors and diverted funds from the intended recipients.

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The investigation resulted in the issuance of subpoenas to 14 charitable institutions, fundraising companies, and individuals in the car donation business. At the same time, the Attorney General filed a case against a fraud charity and its director for alleged misuse of charitable funds intended for the homeless.

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Solicitations for funds seeking donations of used cars are published in the newspaper and billboards all over the country. However, not all of these solicitations come from worthy charities, and others may not come from charitable institutions at all. It is up to you to undertake the necessary measures to ensure that your car will go to a worthy cause and that you will be granted the appropriate tax deduction.

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Here are some tips for donating your car to charity:


  1. 1
    Search for a charity in your area that will directly accept your car donation
    You need to do some research for this. Make sure that the charity you are considering is a 501 (c)(3) organization. These are nonprofit groups that can give tax deductions for your donation. There are many ways you can research the charity. You can visit the charity's website, check the nonprofit list of the Better Business Bureau, or search the Charity Navigator, the organization responsible for rating nonprofit groups throughout the country. Here is a checklist of what you need to find out about the charity:
    1. Search the Charities Bureau of the Attorney General, located at to check if the charity followed proper registration procedures and has filed its financial reports with the Attorney General.
    2. Find out how the charity will use your car. Will it go to a needy recipient or be sold? As much as possible, look for a charity that will really use your car in one of its programs or donate it to a needy individual. If the car will be sold, check how much of the sale will be maintained by the charity. Do not be misled by the claim "all proceeds will go to charity." Verify that your donation will be used for the purposes stated by the telemarketer. Check the charity's financial reports and see how much of the proceeds goes to the charitable programs and how much goes to the administrative costs. You can check the financial reports at the Attorney General's website at
    3. Take note that some car donation programs are handled by for-profit towing companies or used car dealers who claim that they will pick up the car for a charity when there is minimal or no charitable benefit. Do not proceed with the car donation if there is no confirmation that it will go to charity.
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  2. 2
    Understand the IRS guidelines for making car donations
    Here are the rules set by IRS for car donations:
    1. Tax deduction will only be made for your donation if it is properly itemized. The estimated value of your vehicle must be properly indicated. Since cars donated to charity are sometimes resold, you should know the resale price of your car for record purposes if the value is more than $500. Otherwise, you need to indicate the car's "fair market value" (FMV).
    2. If the objective of the charity is to provide low cost vehicles to low income buyers, you can also be subjected to a deduction of your car's fair market value or $500, whichever is lower. There are many tools that can help you determine your car's fair market value. For further information on the IRS guidelines, you can check out the IRS pamphlet posted at
    3. Make sure that the organization issues a receipt for your donation. This is a requirement for you to claim a tax deduction. Complete the forms required by the IRS such as Form 8283 (Visit These forms need to be attached to the tax return, depending on the value of deductions you are claiming.
    4. For more information on the guidelines and requirements, you can check out the IRS website at
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  3. 3
    Keep all your receipts from your car donation
    If the amount of your car donation is more than $500, enclose IRS Form 8283 with your tax return. If the value exceeds $5,000, enclose an outside appraisal. The IRS also requires proof of donation and a copy of the title change.
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  4. 4
    Deliver your car donation to the charity yourself
    Although the charity will hire someone to pick up your car, you can save them the cost by delivering the car yourself. However, you need to make the necessary arrangements with the charity so that the documents for your donation can be readied.
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  5. 5
    Protect yourself from any liabilities
    There are instances when people who donated cars to charity were held liable for an accident after the donation, so make sure to properly transfer the title to the charity. You can check with the Department of Motor Vehicles on the transfer procedure. Make sure that all blanks are filled in, because someone else might fill them in if you don't. Avoid leaving the ownership part blank on the papers. If the charity does that, donate to another organization.
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Donating your car to charity might be a lot of work for you, but it is worth the effort if it is for a worthy cause. After all, it is better than sending your car to the junk shop.

Questions and Answers

Can I get a tax credit if I donate a car with a blank Florida car title?

No, you will need to have the car title in your name in order to get credit for the car on your taxes. In order to get credit you will need to have your name somewhere on the title in order to be labeled as the donor/owner of the vehicle. With the title being blank it will be very difficult to get credit for the car.

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Titling of cars to charities in Florida?

My church in Florida wants to give my donated car to a single mother. Does the church have to transfer title to its name and then transfer it to the single mom?

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Article Info

Categories : Financial

Recent edits by: Melvin Magadia, Maria Quinney, Eng

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